The Australian Securities and Investments Commission (ASIC) has decided to take matter in its hands in an attempt to save many Australians trading their incomes and losing big money to binary online trading and Contracts for Difference (CFD) investments.
According to ASIC, Australian clients last year lost $490 million on binary options trading alone. This big dent now is prompting ASIC to shut down the multi-billion-dollar online trading shop in Australia. Simultaneously, CFD will see new restrictions levied from ASIC to protect client interest. Most of the Brokers are ASIC regulated and their practices have cost millions of Australian huge loses. In its latest consultation paper, ASIC stated that both these portals are complex and confusing where Australians are losing hundreds and millions of dollars every year.
“Our proposed product intervention will effectively mean that binary options will no longer be lawfully available for acquisition by retail clients in Australia. We expect that this strong measure will reduce harms suffered by retail clients resulting from binary options,” ASIC said in the consultation paper.
In a report published earlier, it was revealed that many ASIC regulated foreign exchange (forex) brokers were forcing Australians to Invest money in lost deals. ASIC Commissioner Cathie Armour said the regulator was not proposing banning CFDs completely but only in part as it would take Australian Clients overseas. “Unlike binary options, CFDs can serve legitimate trading, investment and hedging purposes. However, we consider consumer protections are necessary. We were conscious to balance this with the risks of leverage and that Australian clients may seek higher leverage offshore,” she said.